Obama seeks new strategy on fiscal cliff

WASHINGTON — President Barack Obama, conceding that a "grand bargain" for deficit reduction with Speaker John Boehner is unlikely, called Friday for Congress to approve a stripped-down measure by year's end to prevent a tax increase for all but the richest taxpayers and to extend aid for 2 million unemployed Americans.

"That's an achievable goal; that can get done in 10 days," Obama said to reporters during a hastily scheduled evening appearance in the White House briefing room. "Call me a hopeless optimist, but I actually think we can get this done."

The president, who took no questions, read his statement just after a brief phone conversation with Boehner and a separate meeting at the White House with Sen. Harry Reid, D-Nev., the Senate majority leader. It was Boehner's stinging defeat Thursday night — when rebellious antitax House Republicans blocked a vote on his tax plan, after he had suspended negotiations with Obama — that forced the president to reach for a fallback strategy with Senate help.

By Friday, both the House and the Senate had closed for the Christmas break, and soon after his statement Obama left with his family for their annual holiday trip to Hawaii, his native state. His return date is dependent on events, aides said.

But as he and Democrats in Congress envision the coming days, the Senate would reconvene Thursday to pass a compromise bill with commitments of cooperation from both Boehner and Sen. Mitch McConnell of Kentucky, the Republican minority leader, to keep the process moving.

Facing the Dec. 31 deadline for the expiration of all Bush-era tax cuts, McConnell would need to promise not to filibuster and Boehner would have to agree to a House vote on the Senate-passed bill.

Presumably, the sort of fallback measure that Obama seeks could pass in the House only with strong support from Democrats, since conservative Republicans, by their revolt against Boehner this week, have signaled that they would not approve even legislation that raises tax rates for fewer than 1 percent of Americans.

While many in both parties believe that Boehner will permit the vote on a compromise under the intense pressure, with public opinion on the newly re-elected president's side, doing so could threaten his already weakened speakership among conservatives.

Without such action, taxes would increase Jan. 1 for every taxpayer. National polls have shown that most Americans would blame Republicans.

Obama, backed by congressional Democrats, is proposing as he has for four years that the Bush tax rates be extended permanently for all income less than $250,000 a year. In negotiations with Boehner he had tentatively agreed to raise that threshold to $400,000, and congressional Democrats on Friday said they would go as high as $500,000 if it would seal a deal with Republicans.

But the Republicans' rejection of Boehner's bill Thursday indicated that such a concession by Democrats would not sway the anti-tax absolutists among them. The speaker's so-called Plan B would have extended the Bush tax cuts for income up to $1 million, meaning a tax increase for only an estimated 0.3 percent of households, yet that was too much for many of his members.

While the strategy that Obama and Reid are now pursuing requires the acquiescence of both Republican leaders, McConnell has given no indication whether he would give it. Asked at the Capitol before Obama's statement whether he would agree not to filibuster the stripped-down bill, he stepped onto an elevator and said, "Merry Christmas."

Boehner has not said when or whether he would call the House back in session, but a spokesman said late Friday that the speaker would return to Washington from his Ohio home after the holiday "ready to find a solution that can pass both houses of Congress."

"It is time for the Democratic-run Senate to act, and that is what the speaker told the president tonight," said Boehner's spokesman, Brendan Buck.

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